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Cloudpreneurs

McKinsey & Company |

Cheap computing +

2

Small in-house server

$31.55/mo

Small Public Cloud Instance

$16.06/mo

McKinsey & Company |

Agility +

3

Minutes60-150+ days

IT

Contact IT

INTAKE

CUSTOMER VERIFIES AND DEPLOYS

Final Review

Project approved, PM

assigned

InfrastructureEngineering

T

M/W/F

2

6

BUILDTICKET

Manager assigns Engineer

Engineer builds VM

Engineer installs & configures OS

Second engineer completes QA

Engineer completes MVM Scan

Backup & Recovery

Network Monitoring

Complete

Verify specs / stack

Deploy

Verify

App Scan

SOLUTIONING

Infrastructure engineers,

Agency business owners and SI

design solution

3Follo

w up

meetings

4

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PR

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1

ARM contacts Agency CIO

Initial Executive

Review

Solution Review

High Level Review

T

M

Th

Agencies

Iterations

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New experiences =

4

Social

Local

Mobile

Big-data

Rapid development / iteration

Heterogeneous clients

Bursty computations

Cloud

McKinsey & Company | 5

Entrepreneurial groundswell

Salesforce.comSalesforce.com Workday Workday

Intermedia Intermedia AWSAWS

Regional sales team HR manager

Small business owner IT Infrastructure manager

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Explosive growth

6

Contracting

Fast

Rapid

Explosive

27%

23%

25%

25% 3-70x

1-3x

0-1x

0-0.5x

1 > 100 VMs under management, *annualized growth based on 5 months dataSOURCE: Newvem analysis of AWS instances under monitoring

McKinsey & Company |

Including enterprise

7

None

Selectivedeployment

Deployedat scale

2012

10

47

43

2010

58

37

5

Public IaaS adoption

SOURCE: McKinsey Quarterly Survey on information and technology strategy, 2010, 2012; n=532 CIOs

McKinsey & Company |

Not monolithic

8SOURCE: McKinsey Cloud Computing Survey, 2010, 2012

Public : <10%Private: 70%Remainder on traditional architecture

High

LowLow High

Degree of regulation

Complexity and data

interdependence across application

domains

▪ Banking▪ Insurance▪ Healthcare

▪ Manufacturing▪ Distribution▪ Transportation▪ High Tech

Public : 20-25%Private: 60-75%Remainder on traditional architecture

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Security & regulatory barriers

9SOURCE: McKinsey Cloud Computing Survey, 2010, 2012

2010 2012

1

2

3

4

5

6

7

8

1

2

3

4

5

6

7

8

Security

Regulatory exposure

Skills

Business case

Interoperability

Cloud awareness

Changing business processes

Governance

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Security issues can be mitigated

10SOURCE: McKinsey on Business Technology: Protecting information in the cloud

▪ Rigid policy based security approach

▪ Business-focused risk-management approach that engages business leaders

From To

▪ Focus on securing technology (networks, servers)

▪ Focus on securing information and processes

▪ One size fits all policies (i.e., “we’re going 100% cloud” or “we forbid cloud”

▪ Workload specific analysis to match risk with application and data criticality

▪ Specialized IT talent aligned to technology “towers”

▪ Integrated service managers aware of business implications

McKinsey & Company | 11 11

Incumbents under pressure

Source: McKinsey cloud initiative

Traditional Product ModelTraditional Product Model Cloud Purchase ModelCloud Purchase Model

Rev

enue

Up-

front

sel

l

Inst

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tion

serv

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Rev

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McKinsey & Company |

Huge value at stake

12

Mini-computers + Transaction systems

PCs + Productivity SW

Client server +ERP

Cloud / SaaS +Mobility + Big Data

‘70-’80 ‘80-’90 ’90-’00 Now

Efficiency & record-keeping

Workgroup decision making

Standardization and efficiency

Innovation through insight and rapid execution of ideas